A dynamic model of livestock disease and decentralised economic behaviour is constructed as a jointly determined system. By accounting for feedbacks between behavioural choices and disease outcomes, the model captures the endogenous nature of infection risks. Government mandated testing of livestock herds and how private biosecurity incentives are affected by the structure of disease eradication polices are considered. How well disease control policies are targeted affects their effectiveness and may result in farmers substituting government testing and disease surveillance for private biosecurity. Numerical simulation results demonstrate that failing to account for feedbacks between the disease ecology and economic systems may overestimate the effectiveness of government disease control policies.